Everyone who has been blessed with common sense is waiting for the big market reversal to occur, but is always one day away as Annie once sung.
What is important now to realize is that the Yen’s weakness created additional money flow into other asset classes like Global Markets and the US Dollar as Mrs. Watanabe had to make some portfolio changes in her staid Japanese Government Bond portfolio.
To find hints and clues that the market has the potential to reverse, we must look at longer time frames to capture key price points that would indicate a top is in.
One, on Friday, was 101.26 in the USD/JPY which would have indicated a Bearish Engulfing, or Outside Reversal day on the weekly chart and signaled to technicians that there are sellers in the market. But we were saved from a very negative chart pattern by the end of US trading and the beginning of Memorial Day holiday in the States.
If you have any questions, please contact eric (at) caesartrade.com